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I filed bankruptcy 4 years ago and did not reaffirm my mortgage with Wells Fargo nor my home equity loan with Chase. I am current with both loans but when I called wells Fargo to try and refinance, they said that they could not talk to me. What are my options if I do not reaffirm or if I do? Would it be in my best interest to reaffirm or not? We are thinking of downsizing so how does the payoff work?
11 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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You can't reaffirm at this point.
Answered on Nov 07th, 2014 at 5:21 AM
Derek W. Freeman
Generally there is not much to benefit by reaffirming a loan. A reaffirmation agreement protects the creditor, not the debtor. If you sign a reaffirmation agreement, then if you can't make payments later on down the road and you go into foreclosure, the lender can sue you for the deficiency. If you don't sign a reaffirmation agreement, the lender can't sue you for the deficiency because the loan will be covered by the bankruptcy. As for your lender not talking with you, are you still in a bankruptcy? Are you in a chapter 13 plan? If so, the lender can't communicate with you because of the automatic stay.
Answered on Nov 06th, 2014 at 2:59 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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The option to reaffirm a debt ends when the bankruptcy case is closed. I assume that a Chapter 7 filed four years ago has been long closed, therefore, you can't reaffirm at this late date. Well Fargo can't talk to you because it violates the discharge injunction, none of your discharged lenders are allowed to make any attempt to collect the debt. To avoid running afoul of this law, most lenders prohibit any communications with discharged debtors. Well Fargo can't refinance your loan because there is provision in the bankruptcy law which prohibits changes in loan contracts that have been discharged, If you want to refinance, you could move the bankruptcy court to allow Wells to negotiate with you and to amend its loan contract but that will be expensive and time consuming - particularly since you don't even know if Wells is willing to allow a loan modification. OR you could go to another lender - other mortgage lenders are subject to the laws which prevent Wells from negotiating with you.
Answered on Nov 03rd, 2014 at 3:25 PM
I do not suggest you reaffirm your mortgage.
Answered on Nov 03rd, 2014 at 11:21 AM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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Reaffirming a mortgage can only be done within a specific time frame after the bankruptcy case is filed and before it closes. BUT, it is not a good idea to reaffirm a mortgage and I've never recommended it or done it for any of my clients, although if they insist on it I will do as they wish after they sign a disclaimer that they have been advised against it. As far as refinancing, what the new prospective lender would need is a statement from the current lender showing a payment history. Not reaffirming means that the payment history is no longer being reported to the credit bureau. In lieu of that a statement from the lender showing payments should suffice. You can obtain this by contacting the current lender and asking them to send you a statement of activities since the date you filed your bankruptcy. You can then take that statement to the mortgage broker or whoever you are working with to get a new mortgage.
Answered on Nov 03rd, 2014 at 12:57 AM
William Rhymer
Most courts will not let you reaffirm a debt once the case has been discharged. You can refinance it through another bank. If you did not reaffirm on the 1st and 2nd mortgage, you can usually walk away from the house and not have to pay any money to the mortgage companies. However, I would suggest you contact your bankruptcy attorney and discuss it with him or her and then decide what you want to do.
Answered on Nov 03rd, 2014 at 12:56 AM
Deborah F. Bowinski
You cannot reaffirm your loan at this point in time. And it was probably the right choice not to reaffirm while your bankruptcy case was pending, in spite of what the grunts at Wells Fargo may be telling you now. They are not lawyers, nor do they have your best interest in mind. If Wells Fargo will not refinance, try to find another lender to do the deal. If you choose to downsize then the payoff works the very same way it always does. If there is enough value in your home to pay off the loans in full at closing then you are free to sell. If the value is not there you are left with either trying to put together a short sale or walking away from the property knowing that both mortgages were discharged in your bankruptcy.
Answered on Nov 03rd, 2014 at 12:55 AM
Debt Settlement Attorney serving Chicago, IL
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Law Offices of Daniel J. Winter
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It's too late to reaffirm if you filed Chapter 7 4 years ago. Your bankruptcy case is over. It is not required or advisable to reaffirm a mortgage. Go to a different lender who may not have that requirement, and show your payment history to them.
Answered on Oct 31st, 2014 at 5:47 PM
Once you receive your bankruptcy discharge, it is too late to reaffirm. But reaffirming a mortgage debt is nearly always a bad idea because if your property is foreclosed on & sells for less than you owe, you are legally responsible for any difference if you reaffirmed. So not a good idea. Instead of trying to refinance with your lender, why not apply for a loan modification instead? Or go to another lender if you really want to refinance. The disingenuous people at your mortgage company who are telling you to reaffirm in order to refinance are telling you to fly without wings. In short, they are saying they will not refinance your loan under any circumstance.
Answered on Oct 31st, 2014 at 5:45 PM
Debt Relief Attorney serving Anaheim, CA
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Marlin Branstetter Attorney at Law
It is not a good idea to re-affirm. Contact other lenders about re-finance. You are entitled to a payment history from Wells Fargo. You can use that to establish your payment history with another lender.
Answered on Oct 31st, 2014 at 5:44 PM